Do I need to disclose repairs performed after a small fire?

QUESTION: I am listing a property that previously experienced a small fire. There is no remaining evidence of the fire, and the seller has retained receipts for all the remediation work. Does the fire still need to be disclosed as a material fact? Would this situation be like a small plumbing leak where disclosure would not be required once repaired?

ANSWER: In most cases, disclosing that a property has been damaged and repaired is advisable, even if the issue does not rise to the level of a material fact.

A material fact is any fact that could affect a reasonable person’s decision to buy, sell, or lease property. A material fact must be disclosed by a broker to the parties in the transaction and any interested third parties regardless of the broker’s agency role within the transaction. If a fire or plumbing leak causes substantial damage which requires major repairs, then clearly disclosure would be required under the License Law.

But what about a small repair after the property is damaged? How do you know whether a repair is a material fact or not?

Fortunately, these are not questions you need to answer definitively in most cases. When in doubt, err on the side of disclosure.

The North Carolina Real Estate Commission has stressed that disclosure serves to put potential buyers on notice, allowing them to investigate further if they choose. This is particularly important for latent defects – issues that may not be immediately visible – such as a wall that has been repaired and repainted following a water leak. Even if damage to a property is small and fully remediated, there are many issues that could be investigated by the buyer. For example:

1.     What caused the damage? Does the risk still exist? Could it reoccur?
2.     Are there any lingering effects or hidden defects?
3.     How long ago was the repair performed? Does the repair need updating?
4.     Did the repair require a permit, and if so, was one acquired?
5.     Was an insurance claim filed, and if so, will it affect the buyer’s ability to obtain insurance?

These questions show that even a small repair to minor property damage may lead to questions that involve material facts, even if the damage and repair itself was not technically a material fact. So, in both your examples, even though the damage by the fire and plumbing leak are not extensive, you should disclose the repair so that the buyer can investigate. Without disclosure, they may not even know that the damage and repair occurred at all.

More importantly, the above questions show that disclosure is in your seller’s best interest. Buyers who uncover past damage and repairs often threaten or initiate legal action against both the seller and the listing firm. Providing upfront disclosure, along with evidence that all necessary repairs have been completed, will significantly reduce this risk.

Release Date: 04/10/2025

---